MARKET REVIEW APRIL 22 - 26

In the week to Friday, April 26, the main initiative takes the United States. Starting with the number of economic releases, ending with the beginning of one of the most volatile weeks in the stock market of the USA. According to one of the main American indices, namely: S&P500, 155 companies report, this will add volatility not only to the index but also to the USA dollar. After all, that to buy shares of a company, you need to buy the USA dollar.

Europe on Monday has a rest. They continue the celebration of Catholic Easter, the Bright Monday. Only on Wednesday, the EU will be able to attract the attention of investors with releases of business expectations, the current situation and the business climate in Germany. The ECB will publish a monthly report on monetary policy. There is nothing new expected since the last meeting of the European monetary policy regulator, taking into account the fragile economy of the EU.

Therefore, the main volatility in the main pair, and in other dollar pairs, will be contributed by the USA. The week will begin with a report on business activity in the manufacturing sector, as well as sales in the secondary housing market. Expectations are more positive than neutral, which will allow the American people to start the week on a positive note.

On the second day of the week, we will learn about business activity in the service sector and sales of new housing. On this day, it will be possible to look at the USA stocks and indices. After all, since Tuesday begins to come out a huge number of reports from American companies. As we wrote above, at the equator of the week the attention will be to Europe. On Thursday, we should pay attention to orders for durable goods and their volumes, as well as the number of initial applications for unemployment benefits. The most volatile economic news for the US dollar will be the USA GDP, which will be released at the end of the week. As this is the first estimate of GDP for the first quarter, so it promises to be very volatile. An additional driver will be the leading indices from the University of Michigan about the expectations and consumers sentiment.

During the reporting period of American companies, the risk increases significantly, so don't ignore it. Wall Street will make its contribution as in the case of good revenues and forecasts of companies, conversely, if the reports are disappointing and the income forecasts are understated.

USD/CAD

The Canadian dollar this week also merits attention. As we said earlier, Canada is already preparing for a political race in view to forthcoming elections. The stumbling block was the energy sector, in particular, the oil and processing industry of the country. Against the background of rising commodity prices, which we will discuss separately, this source of income is extremely important for the maple leaf country. Last Thursday, Canada announced that it was extending the deadline for a decision on whether to continue the expansion of the Trans Mountain pipeline until June 18 from mid-May. This project can triple the amount of oil coming from the Oil Sands of Alberta (Canada) on the coast of British Columbia. But its under pressure from local groups, environmentalists, and the British Columbia government.

This delay will allow the government of Canada to resolve disputes and find consensus with indigenous groups that may be affected by the pipeline. The Trans Mountain is an important project for Canada, which will increase the export of crude oil, as a result, and profit. This week you should pay attention to the volume of wholesale sales in Canada, and also at a meeting of the Bank of Canada, where the regulator will announce a decision on interest rates. The meeting will be held on Wednesday, as changes in policy are not expected, the key will be the rhetoric of the regulator. It is the rhetoric that will determine the trading sentiment on the Canadian dollar within the current week.

OIL

How to skip trading on crude oil? The major participants of this market do not give decent to oil traders. As we know on Monday morning, today the USA will announce that “From the second of May, the State Department will not deny sanctions to any country that currently imports Iranian oil or condensate”-tells the columnist of "Post" the Josh Rogin, referencing to the state Department officials.

The supply of crude oil falls due to supply cuts by OPEC member countries, led by Saudi Arabia. Many experts and analysts argue that "a serious loss in volumes (Iranian) will put pressure on the market, given the political tensions in Venezuela and Libya."

Against this background, the USA President Donald Trump last weekend spoke with Crown Prince of Saudi Arabia Mohammed bin Salman by phone. The middle East Kingdom now has more than 2 million barrels per day of free capacity. Since the termination of benefits from the USA will cause a strong blow to Asian buyers. The largest consumers of Iranian oil are China and India, both countries are lobbying for the extension of benefits for them.

Therefore, from now on, volatility will be increased. We expect the speech of USA secretary of state Mike Pompeo and subsequent comments. Given the reduction in the number of drilling rigs by eight units last week, according to data from Baker Hughes, the mood is quite bullish. If the United States will not provide benefits for countries in Asia, the mood will remain until Wednesday, when it will be published a report on the status of stocks of raw materials in the United States.

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